December 1, 2006

 

CBOT Soy Review on Thursday: Ends up on speculative buys, spillover support

 

 

Soybean futures on the Chicago Board of Trade ended higher Thursday, buoyed by speculative buying amid spillover momentum from outside markets.

 

January soybeans finished 3 1/4 cents higher at US$6.85 1/2, and March soybeans ended 4 1/4 cents higher at US$7.00 1/4. January soymeal settled US$0.10 lower at US$196.00 per short tonne, while January soyoil ended 22 points higher at 29.62 cents a pound.

 

The absence of fresh fundamental directives kept soybeans in the role of a follower, feeding off price strength in grain, energy and metals markets, analysts said.

 

The theme was consistent from the outset, aside from a brief dip into negative territory, precipitated on a sharp break in corn futures down the stretch, traders said. However, the declines were short-lived, as a rebound in corn attracted fresh speculative buys to quickly rekindle the market's higher tonnee, traders added.

 

Underlying support continues to revolve around perceptions soybeans have to fight for 2007 acres with corn, a floor trader said. In addition, solid underlying demand coupled with strength in soyoil is supportive to keep sellers hesitant to press the market, he added.

 

Technical incentives added to the mix, as futures remain entrenched in technical and fundamental uptrends, analysts added.

 

The DTN Meteorlogix weather forecast said showers are in store for much of Brazil's soybean belt during the next three days. Argentina's major corn and soybean belt had rainfall of up to three-quarters of an inch on Wednesday. A drier weather pattern will occur to finish out the week. There are no major crop weather concerns at this time in South America, Meteorlogix reports.

 

In pit trades, speculative funds were buyers of 2,000 lots, with RJ O'Brien buying 500 January. JP Morgan and Iowa Grain each bought 400 January, and Tenco bought 600 November. Selling was scattered among various commission houses.

 

 

SOY PRODUCTS

 

Soy product futures ended mixed, with soyoil gaining product share on speculative buying. Supportive weekly export sales and optimistic long-range demand prospects for world vegoils served as catalysts to propel soyoil futures to new contract highs, analysts said.

 

Soymeal ended narrowly mixed, losing ground to soyoil on spreads, with higher-than-expected deliveries and a hefty increase in Census soymeal stocks weighing on prices, analysts said.

 

January oil share ended at 43.04% and the January crush ended at 71 1/2 cents.

 

In soymeal trades, speculative funds were net sellers on the day. Tenco sold 1,000 March and JP Morgan sold 500 January. JP Morgan was a featured buyer.

 

In soyoil trades, speculative funds were estimated net buyers of between 3,000 and 4,000 contracts. UBS Securities, Calyon Financial, and Fimat each bought 300 January. RJ O'Brien bought 400 January, with Tenco buying 500 January and 300 July. Bunge Chicago sold 300 December and 500 January, UBS Securities sold 600 January.